Learn the Three Key Factors that Differentiate Target-Date Funds
Rich Weiss, Sr. Vice President, Sr. Portfolio Manager, discusses the importance of:
- Risk-aware glide path design
- Effective diversification
- Active management
- Target Date Funds for Investment Professionals
- Target Date Funds for Retail Investors
- Importance of Sequence of Returns (log-in required)
A One Choice Target Date Portfolio's target date is the approximate year when investors plan to start withdrawing their money. The principal value of the investment is not guaranteed at any time, including at the target date.
Each One Choice Target Date Portfolio seeks the highest total return consistent with its asset mix. Over time, the asset mix and weightings are adjusted to be more conservative. In general, as the target year approaches, the portfolio's allocation becomes more conservative by decreasing the allocation to stocks and increasing the allocation to bonds and money market instruments.
The BrightScope and Target Date Analytics "Popping the Hood VI, 2013" study grades target date mutual fund families on five criteria, including performance, fees, risk, organizational structure and strategy. The Overall Score for each fund family is simply the product of the scores of the five major components, weighted as follows: Company/Organization: 10%; Strategy: 15%; Performance: 30%; Risk: 25%; Fees: 20%. Each fund series receives an overall score and ranking. Researchers analyzed 48 fund companies, but ranked only 43; those were the fund series old enough to have three years of operating performance data. The study uses 2012 performance data. The study is based on the lowest price share class offered by each fund family, typically the institutional share class. The investor class, A, C, and R share classes are subject to higher expenses. Please consult the prospectus for the eligibility for each specific share class. The study is conducted on an annual basis and a new study will be available in June 2014.
You should consider the fund's investment objectives, risks, charges and expenses carefully before you invest. Each fund's prospectus or summary prospectus, which can be obtained by visiting americancentury.com, contains this and other information about the fund, and should be read carefully before investing. Investments are subject to market risk.
American Century Investment Services, Inc., Distributor